EXECUTIVE SUMMARY: Technological advances such as social media, mobile devices and data analytics are changing the way businesses

around the world operate — and that includes the financial services industry. According to Accenture, “digital

technologies have more potential to transform the financial services industry than almost any other industry.”2

This transformation is not just about technology itself, however; it’s about consumers and their experiences

interacting with the brand.

“This year marked a crucial transition point for the retail banking industry

— according to CEB [Corporate Executive Board] research, for the first

time more than 50% [of respondents] prefer to do business with their bank

via online or mobile. This single statistic underscores a dramatic, ongoing

change in customer behaviour as more and more customers look to

mobile applications and the web, rather than the branch, to serve most

of their retail banking needs.”1 — Tower Preview (2014)

Many financial institutions (FIs) have begun adopting

mobile and social media communications in their

operations. In the U.K., for example, mobile banking

weekly usage grew from 4 percent in 2011 to 14

percent in 2014 as shown in Graph 1.3 Currently, FIs

seem most adept at using digital channels for risk

management and fraud control: many banks send

customers text messages that alert them to potentially

suspicious activity or to a large purchase on their

account, so they can spot fraudulent activity early.

However, few banks currently use digital channels

such as social media or mobile to engage customers

and drive business growth — which presents a

significant opportunity. According to a Deutsche

Bank report, mobile-banking consumers on average

“interact with their bank more frequently — up to three

times more than consumers who bank online and 20

times more than those who bank via their branch.”

The 2015 Retail Banking Outlook Survey conducted

by the Corporate Executive Board (CEB) found that

“improving service and customer experience in digital

channels is an agreed upon priority for both the front

and back office of the bank.”4

Engaging Customers: Why Should FIs Move Toward a “Bring Your Own Persona” Approach?

www.tsys.com

By Morgan Beard, TSYS; Bruno Courbage, FICO

White Paper

Monthly Weekly Daily

Source: Accenture ©Statista 2014

Graph 1. Frequency of mobile banking usage in the United Kingdom (UK) from 2011 to 2014

2011 2012 2014

3% 3%4% 5%

7%9%

6%7%

14%

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An emerging treasure trove of consumer data makes the

move toward digital technologies even more imperative.

FIs can use rich consumer data profiles to more effectively

segment and personalise their customer communications.

Traditionally, for example, card issuers have relied on

sociodemographic data — such as income, age and

geography — to market their various products and services

to different customer segments. But today there’s a

growing awareness that sociodemographic segmentation

isn’t enough.

More FIs are leveraging “Know Your Customer” (KYC)

methods, traditionally a risk-management tactic and regulatory

compliance obligation, as an approach that allows customers

to elect their preferred channel of communication, whether

it’s email, mobile or mail. That’s part of the evolution in

segmentation. Still, FIs must vastly improve their engagement

efforts by using today’s volume of data and digital technologies

to create the ultimate customer experience — not just one

that’s channel-specific.

This report explains how FIs can differentiate themselves in the digital era by radically improving

their current customer segmentation approach. This new model — referred to as “bring your own

persona” (BYOP) — is built upon understanding the degree to which the various types of consumers

embrace technology and, just as critically, trust their FI with their privacy and data.

This report explains how FIs can differentiate themselves

in the digital era by radically improving their current

customer segmentation approach. This new model —

referred to as “bring your own persona” (BYOP) — is built

upon understanding the degree to which the various types

of consumers embrace technology and, just as critically,

trust their FI with their privacy and data. This approach

demonstrates a deeper understanding of customers’ growing

appetite for digital interactions and their divergences in terms

of willingness to share personal information.

The report starts by introducing BYOP and its concepts

and then takes a look at the key influencers that drive how

consumers currently engage — and what that means for FIs

today. It looks at findings from the 2015 TSYS Consumer

Payments Studies conducted separately for both the U.K. and

Germany, which identified key consumer preferences around

engaging with financial institutions. This paper concludes by

providing four prescriptions for FIs that intend to use a BYOP

approach to engage customers.

Know Your Customer + The Hyper-Connected ConsumerIn recent years, FIs and card issuers have been subject to

global banking regulations called “Know Your Customer”

(KYC). KYC was initially the name for regulations that

governed how banks verified customers’ identities and

assessed their risk level in order to prevent fraud. In recent

years, however, the term has been used more loosely to

describe a strategy by which FIs take a more holistic view of

their customers.

The regulations require banks to collect more information

and details about their customers to help deter fraud and

money laundering. This gathering of information has had far-

reaching benefits beyond regulatory compliance alone. Such

intelligence has provided FIs with customer insights that can

be used to engage customers through digital channels such

as mobile and email while ensuring that the messages and

their frequency reflect each customer’s unique preferences.

As consumers increasingly use multiple forms of

communication to engage with their FI, simply taking a KYC

approach to segmentation — with a bank identifying how,

what and how often to communicate with customers — is not

enough. One core challenge of using KYC for segmentation

is that if the boundaries are interpreted too conservatively,

an opportunity to more effectively engage customers may

be overlooked. For example, customer-provided KYC

metrics might be many years old, which could cause an

FI to automatically mail letters to customers with account

notifications. However, some customers may be willing to

receive such notifications via a text message — arguably

a more efficient and cost-effective approach, assuming

the customer has authorised text-based communications.

Additionally, offering customers new and multiple channels of

communication can build loyalty by tailoring communications

to each customer’s wants and needs.

The bottom line: Taking a KYC approach to segmentation

is no longer adequate in today’s marketplace, which has

been revolutionised by digital interactions and an “always-

connected” mindset. Consider how Starbucks’ mobile

application (app) allows customers to pay for a latte, or how

Uber’s location-based app lets users request a driver. These

Engaging Customers: Why Should FIs Move Toward a “Bring Your Own Persona” Approach?

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new expectations are being guided in part by growing

adoption of mobile devices and social media, and by

improved user interfaces.

The We Are Social Digital and Mobile Worldwide Research

Report notes that more than 2 billion people are using social

media worldwide.5 The always-connected digital consumer

is changing the rules of engagement for businesses, and

FIs that react by better understanding their customers and

segmenting them based on their level of digital engagement

will distinguish themselves within the market.

BYOP: Evolving Customer Segmentation The digital era is transforming how people interact and

is reflected in their digital behaviours. Building on this

sentiment, Scott Snyder, in the University of Pennsylvania’s

Wharton School blog Knowledge@Wharton says the key

distinguishing attributes between segments are their

aptitude with digital tools (mobile, social and wearables)

combined with their willingness to share personal data in

various scenarios.6

Knoweldge@Wharton originally coined the term BYOP

and defines it as “identifying new segments by their

digital engagement.” According to Wharton, that persona

is based on two core dimensions: digital capability and

trust.6 Compared to retailers or other industries, FIs hold an

unparalleled amount of customer data due to the nature

of the relationship and the requirements that banks collect

certain types of data. For some customers, that data may

Source: Knowledge@Wharton

BYOP: Digital Profiles

Following the approach laid out by Wharton School’s Scott Snyder, we have segmented the respondents into six personas. Each of the six segments is defined

as follows:

Analogues: They are unwilling to and/or incapable of using digital technologies. They may have been capable digital users who decided to “unplug” due to privacy or life-balance concerns. At best, analogues might be willing to dip their toes into the digital waters via easy-to-use touch points like simple kiosks or websites before progressing to more advanced interactions like mobile and social.

Wannabes: Here we have embryonic users of mobile and social who are very eager to learn the basics so they can seem to be experienced. Wannabes are a group that you want to engage via their peers who have more advanced capabilities. Once Wannabes see their friends doing something cool or valuable, they will educate themselves to at least get by – think of seniors talking to their grandkids on Facebook. Once they realized this was the place their grandkids hung out, they put in the effort to become basic Facebook users (not many have progressed to become power users).

Mainstreamers: These are people willing to opt in to most digital solutions offering the strong possibility of a benefit in the near future. Mainstreamers represent the pregnant middle of the market, ready to be nudged toward behaviours and outcomes that are good for them

and others. Show them the value of each interaction, and they can quickly become loyal digital patrons. If the value equation diminishes (compared to competing offers), you may lose them.

Paranoids: These are cautious users who are very protective of their data and need to be persuaded that there’s a value in sharing their data. Paranoids represent a potentially dangerous group as they will lash out if they believe their personal information is being compromised or misused somehow. Companies that do not respect the privacy needs of this segment risk public scrutiny and bashing.

Chameleons: Here are digital savvy users who will change their digital behaviours and data sharing to suit each situation and personal interests. They are protective of their data when they perceive there is limited benefit or low trustworthiness. Chameleons will educate themselves on the privacy policies of different brands and make sure they share only what they need to. It will take an extremely strong value proposition or clear privacy controls to engage them with highly personalized interactions.

Digital Nomads: People in this segment truly want to port their digital profiles anywhere in any setting. They are willing to share data on the promise of a future benefit for them or a broader group. Digital Nomads fully expect that you will not just collect their data, but use it to deliver an exceptional user experience and significant benefit for them and other users like them. Achieve this and they will be your greatest champions. Fall short, and they will become your biggest critics.

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BRING YOUR OWN PERSONA

Digital User Segmentation Matrix

TR

US

T/

OP

EN

NE

SS

TO

SH

AR

ING

DA

TA

D I G I T A L C A P A B I L I T Y

H I G H

L O W

Wannabes Mainstreamers Nomads

Analogs Paranoids Chameleons

18% 18% 10% 46%

28% 20% 6% 54%

46% 38% 16% 100%E M E R G I N G A C C O M P L I S H E D H Y P E R

Matrix concept source: Knowledge@WhartonData source: TSYS

For this study, we segmented respondents along two axes, trust in sharing data and digital capability. As a proxy for trust, we

used respondents’ willingness to use partnership marketing. Conversely, we took the usage of the Amazon mobile app as a

proxy for digital capability. Full interactivity of the matrix below can be explored at “tsys.com/2015UKConsumerPaymentsStudy”.

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be based on hundreds of interactions over the course of

decades. This volume of data allows FIs to add one more

dimension when understanding a customer’s persona: their

existing customer relationship with the FI.

Digital capability is customers’ ability to maximise their usage

of the latest technologies such as mobile apps, wearables,

social interaction tools, video chat, mobile payments and

location-based services. Trust is the “willingness of users to

share personal data and, in some cases, relinquish privacy in

exchange for a perceived benefit.”6 For example, a “Digital

Nomad” (see sidebar “BYOP: Digital Profiles” for details) —

one of the consumer segments identified by Wharton —

is more willing to share data in exchange for value. That

consumer would therefore be more willing to “check in” at

a restaurant on Facebook in order to receive 10 percent

off the bill.

The existing customer relationship aspect of building

customers’ personas involves assessing each customer’s

current relationship with the FI — how extensive the

relationship is (e.g., how many products the customer has),

the length of the relationship and how the customer has

behaved in the past (whether that includes the customer’s

past and forecasted profitability, risk profile or how active

he or she has been in using the FI’s products and services).

The nature of the customer relationship will help determine

a customer’s engagement level, as an FI will likely want to

present offers differently to a long-time customer utilising

many products than it would to a newer customer who has

just a credit card.

The sidebar, “BYOP: Digital Profiles,” highlights the various

types of consumer profiles based on people’s varying

degrees of digital savvy, their level of trust, their willingness

to share data and their preferred frequency of interactions.

Using such information to segment customers goes beyond

sociodemographic data, because age, income and education

are no longer reliable predictors of a consumer’s digital

capability; therefore, it should not be a key factor in portfolio

segmentation. Rather, appealing to the different types of

consumers today requires different strategies based on their

personas. Too often, FIs take a mass-marketing approach,

presenting the same offers to everyone and overlooking the

unique needs of their different customers, or worse, offering

products to customers who already have those products, and

wasting valuable marketing budget.

Using such information to segment customers goes beyond sociodemographic data, because

age, income and education are no longer reliable predictors of a consumer’s digital

capability; therefore, it should not be a key factor in portfolio segmentation.

Issuers must start identifying and developing solutions for

each of these six personas. BYOP allows issuers to maximise

personalisation and relevancy, translating to a higher level

of customer engagement and profitability. FIs who want to

take advantage of today’s opportunities for personalisation

must assess customers’ individual risk profile before spending

money trying to engage with them. The key question to ask:

Is the future profitability of this person worth the risk?

BYOP allows issuers to maximise personalisation and relevancy, translating to a higher level of

customer engagement and profitability.

Having a holistic understanding of each customer aligns

with the U.S. Federal Deposit Insurance Corporation’s

recommendation that FIs “take a risk-based approach

to assessing individual customer relationships.”7 This is

significant because it signals a swing of the pendulum.

Before the advent of data and analytics, marketing efforts

were strictly based on sociodemographics, and loan

decisions were based on the relationship between a

customer and the bank’s loan officer. The assessment of

risk was judgmental.

From the 1980s onward, banks increasingly used KYC

and analytics for marketing and loan decisions, ultimately

reaching the point where improvements could only be

achieved by using more data to better segment customer

populations. FIs now recognise that the traditional approach

to assessing potential cardholders is no longer adequate.

In the digital age, FIs must use the core dimensions of BYOP

to stay relevant.

While there is a time and cost associated with adopting

BYOP practices, the benefits are many — for example, better

cross-selling of products to the right customers at the right

time, leading to increased uptake.

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Two Key Influencers Changing How Customers Engage

Before using digital consumer profiles to segment customers,

it’s important to understand how customers’ relationships with

FIs are changing. Here’s a look at the two key influencers —

emerging technology and big data — that are driving this shift

in engagement.

Influencer#1: Emerging Technology

Today, consumers leverage technology that is easy to use,

convenient and able to simplify or enhance their lives. The

well-connected consumer has driven the proliferation of self-

service tools introduced by all types of businesses, including

banks. For example, Capital One’s website says that its

cardholders get the benefits of having “access anytime.”8 That

“access” refers to Capital One providing cardholders with

online banking, mobile and tablet apps, 24-hour customer

service and account alerts. Such a seamless experience has

become increasingly important to consumers.

Some non-traditional new entrants are disrupting the

financial services industry and the payments landscape with

solutions targeted at digitally-oriented consumers. Apple

Pay, a smartphone payment solution, is just one example.

Research from Viacom Media found that “73 percent of

millennial consumers would be more excited about a new

offering in financial services from Google, Amazon, Apple,

PayPal or Square than from their own nationwide bank.”9

The same report sheds light on a global phenomenon:

Consumers — particularly the huge millennial generation —

embrace new technologies and expect the companies they

work with to do so as well. While the millennials grew up

using technology, and thus gained the title “digital natives,”

age alone is no longer a key indicator of the likelihood of

someone’s adoption and usage of technology. In fact, the

older age segments are rapidly closing the digital divide. The

2015 TSYS U.K. Consumer Payments Study found no statistical

difference in digital usage among people under the age of

55, underscoring that age should not be a core indicator for

segmentation strategies.10

The 2015 TSYS U.K. Consumer Payments Study found no statistical difference in digital usage

among people under the age of 55, underscoring that age should not be a core indicator for

segmentation strategies.10

Implication: Customers from all walks of life increasingly

expect digital touch points that provide on-demand access

to their account information along with the ability to

transact. Furthermore, age should not be a core indicator for

segmentation strategies.

Influencer #2: Big Data

FIs are in the enviable position of having access to more

data than just about any other industry. Their data includes a

customer’s account information, demographics, transaction

history and contact centre logs. That internal data can be

complemented by external sources, such as website browsing

history and social media interactions. Unearthing such

information allows an issuer to ensure it presents relevant

and timely offers to customer segments who will permit such

data gathering. While data troves have become plentiful

and readily accessible, companies born into the digital

age, including Google and Amazon, are already masters at

leveraging big data for actionable insights.

FIs must take a cue from data-embracing companies if they

want to maximise their reach and consumer loyalty. For

example, an FI may be able to use customers’ social media

data to better understand those customers’ habits and

needs. If a customer’s Facebook profile shows he or she has

5,000 friends, imagine how a bank could use that data to

potentially attract new customers — assuming the regulatory

environment allowed it.

Banks could use public Facebook data to evaluate a

customer’s risk profile. They could also analyse a customer’s

circle of friends to determine their risk, income level,

spending potential and other traits to structure a tailored

marketing plan to that person. While regulators’ attitudes vary

by country, this could technically all be done today.

Data and the analytics software used to parse it can also

fuel more effective customer-acquisition initiatives; expose

early indicators of probability of churn among existing

customers; highlight drivers of customer loyalty; boost

retention efforts and enhance customer service. Research

from Capgemini Consulting found that more than “60

[percent] of financial services institutions in North America

consider big data analytics to be a source of a significant

competitive advantage.” And, the research found that more

than 90 percent believe that “successful big data initiatives

will determine the winners of the future.”11

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Implication: Banks will of course have to be careful to

decipher exactly what types of customer data can be

accessed and used in their regulatory environment — and

without invading a customer’s privacy. But those banks

that embrace big data and use it to better understand their

customers’ habits and preferences will find themselves with

a true strategic advantage. This wealth of data can help

a card issuer truly understand its customers’ needs and

preferences while helping it evaluate the risks associated

with extending certain offers to certain customers.

Enable Consumers to Determine Their Level of EngagementFIs can and should assess and refine the right level of

engagement based on each customer’s persona. Consumer

trends and expectations point to a growing opportunity

for FIs to allow consumers to self-determine their level of

engagement throughout the payments ecosystem. Letting

cardholders opt in to programs offering discounts or

promotions or asking them to share details on the types of

offers they’re most interested in — and letting them choose

the channel through which they want to receive those

offers — will only improve partnership marketing, customer

engagement and loyalty.

Understanding the attitudes and behaviours of the

“Nomads” and “Chameleons” — those digital personas

who quickly adopt new technologies and, in the case of

the Nomads, are generally comfortable with sharing their

personal data — will help in predicting what will be primed

for mass adoption in the medium-term. According to Everett

Rogers’ “Diffusion of Innovation” theory, about 16 percent

of the population will fall into the early adopter/innovator

category, meaning they will adopt new technologies early.

Supporting Rogers’ theory, the 2015 TSYS U.K. Consumer

Payments Study identified the usage of the Amazon mobile

app as a proxy for digital capability and found that 15.7

percent of survey respondents were in the early adopter/

innovator stage10. One key lesson is that special attention

must be paid to the early adopters, as their behaviour can

help companies better forecast what’s coming next.

In essence, this shift toward personalisation and self-

selecting highlights why relying on KYC as a segmentation

approach is no longer enough. The U.K.’s Financial Conduct

Authority (FCA) expects banks to adhere to the principles of

Treating Customers Fairly (TCF), which is the idea of running

a business with your customers’ interest at the centre of it.

In order to adhere to TCF, issuers often become overly

cautious, adopting measures like stopping accounts from

going over their credit limits to avoid issuing penalties and

fees to their customers.

However, providing clear and concise communication

relating to these fees and letting customers decide whether

exceeding the credit limit should be allowed may help

issuers take actions that are in both the customers’ and

their own best interest. Allowing customers to go over their

credit limit when they ask for that ability means an issuer

can worry less about charging a fee — since the customer

agreed to it — while allowing the customers to have the

extra spending power they need, and saving them the

embarrassment of having their card declined.

Issuers that continue to take solely a KYC-centric approach

to segmentation overlook the ability to personalise or

market to micro-segments and personas. Customer

segmentation needs to evolve to keep pace with the fast-

moving digital revolution.

A Stepping-Stone Approach to Segmentation: At What Stage is Your Organisation?FIs must consider taking a step-by-step approach

to abandoning a sociodemographic approach to

segmentation. An issuer should keep the KYC-based

approach, but build on it in order to move toward fully

embracing BYOP.

These four key stepping stones are:

1. Segmenting customers using KYC

2. Establishing a BYOP capability to identify personas

and segment customers

3. Establishing BYOP literacy within the organisation

4. Extending literacy to ensure organisational adoption

of BYOP.

The fourth stepping-stone is only achievable if the various

departments in an organisation are following BYOP and

have the processes and systems in place for accessing

centralised data. This would mean, for example, that the

credit card department would be fully aware that a client

also holds a mortgage with the bank.

To fully embrace the fourth stepping-stone, an issuer must

close the gap between simply knowing its customers

and truly understanding them. In doing so, there may

be times when one department willingly chooses a path

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that is less profitable for their product line, but which will

ultimately achieve a net positive for the FI. Such capabilities

often impact compensation models as well as technology

challenges, which means they produce success only when

sponsored at the highest levels of the organisation.

Challenges with BYOP: Temporary vs. Mission-Critical Shifting to a BYOP customer segmentation approach presents

challenges. For one, the amount of interest and prowess in

digital technologies will vary across the customer profiles.

However, that is most likely a shorter-term issue since the

consumer population is sure to grow more confident in using

technology over time. As witnessed with the advent of user-

friendly technologies such as the Apple iPhone and iPod,

simple user interfaces have helped more people become

comfortable using mobile technology.

The true differentiator is moving up on the trust scale. What

will be more difficult is convincing consumers who are

mistrustful and unwilling to share data, as even someone with

a high level of tech savvy may worry about privacy and be

unwilling to share personal data. This mentality is endemic

among the Paranoids and Chameleons identified by Wharton.

Fortunately, FIs are in a unique position: Most consumers

place more trust in banks than they do retailers or other

business-to-consumer brands. Specifically, consumers trust

banks to safeguard their data against identity theft and other

data security perils.12

While challenges with digital affinity are a short-term issue, trust is the lynchpin to

effective customer engagement.

However, certain digital personas will be very reluctant to

place such strong trust in banks. Encouraging Analogues and

Wannabes to start doing simple tasks digitally — like checking

their account balance online or using an app — can ease

them into greater digital interactions over time and help them

eventually shift away from traditional channels. FIs must, of

course, be extra careful about protecting their customer data,

as consumers will surely lose trust quickly at the first sign of

improperly handled data, deterring them from future digital

interactions. The key is to avoid abusing trust and make sure

that consumers feel 100 percent in control of their data, as

well as the access to and usage of it. While challenges with

digital affinity are a short-term issue, trust is the lynchpin to

effective customer engagement.

Four Prescriptions for Gaining Success with BYOPWhile a stepping-stone approach to BYOP can help ease the

transition, FIs can improve their odds of success by following

certain best practices. Here are four prescriptions for how FIs

can generate results in the BYOP era:

Prescription #1: Build personas based on the right

activities and preferences for your customer base

Issuers should create their own digital personas based

on three core dimensions: customers’ level of trust, their

digital proficiency and the breadth and depth of their

relationship with the FI. Building personas based on these

three dimensions will enable customers to feel understood,

since their preferences are recognised in such an approach.

It’s important that FIs remember that consumers are

already confidently tapping into a growing number of

mobile applications that reflect their individual tastes and

preferences — such as creating their own music stations on

Pandora. Unsurprisingly, then, they increasingly expect such

personalisation and self-direction from their FI.

FIs can and should leverage Web analytics to help provide

this personalisation. For example, in lieu of placing a banner

ad promoting a credit card on its homepage — one seen by

all site visitors — a bank could use data analytics to generate

relevant offers based on its site visitors’ unique browsing

behaviours (assuming those visitors’ browser privacy settings

and cookies allowed for it). If a site visitor has recently been

on a real estate site, for example, the bank’s website could

display an ad for a home loan when that person visits the site.

Meanwhile, issuers will also need to educate and support

Analogues and Wannabes on the adoption of digital tools.

One way to do this could be through a combination of

interactions that reflect their unique needs, along with

incentives such as fee waivers or making a customer’s funds

more rapidly available when transactions are completed

digitally. FIs can identify the digital activity or transaction type

that is not as frequently used by these personas and motivate

usage of it. For example, FIs could offer a rebate to users who

switch to paying their rent or mortgage via a mobile phone

rather than by personal cheque.

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Prescription #2: Make it easy: digital enablement for customers

While retail banking has responded to the digital era with

“How can I help you?”-type chat functionality on their

websites, more digital functionality with keen consideration

for improving the customer user experience (UX) is imperative

for FIs wanting to be seen as embracing today’s technologies.

This report defines “digital enablement” as establishing two-

way communication between an issuer and its customers

— but on the customers’ terms. This is underscored by

findings shown in Graph 2 from a 2014 Synergistics, which

identified consumers’ preferences and desires for engaging

with FIs.13 Findings revealed that 67 percent of respondents

are “comfortable” or “totally comfortable” with self-service

applications that support banking activities.

Digital channels make it easy for a customer to communicate

whether they are accessing their account or seeking support

from customer service. One example is Bank of America’s

robust mobile app that allows users to turn account

notifications and alerts on and off. An issuer could also allow

customers who use the mobile app to alert the issuer that

they are travelling abroad — a task that currently requires

most customers to call their issuer or use its website. A

few clicks could save users the hassle, embarrassment and

inconvenience of a declined transaction. 

While omnichannel communication involves creating a

consistent customer experience across multiple channels,

BYOP takes it a step further by offering a continuous

experience. FIs typically have strong infrastructure in place

to support phone and online customer communications, but

all too often mobile and social channels are less mature.

All channels — phone, agent, Internet, mobile and social

media — must be well-developed in order to offer a

continuous experience. For example, certain customer

segments (such as the Paranoids) may not be comfortable

interacting via mobile or computer, and will only interact at

a bank branch. While this type of customer will most likely

decline in number over time, more traditional methods of

communication must remain intact to support them.

Some banks have excelled at integrating the traditional

branch and digital experiences. Barclays, for example,

is encouraging digital engagement for branch visitors,

according to the report UK Banking Financial Services Trends.

It states: “Thousands of iPads — 10,000 at Barclays alone

— have been installed in bank branches with 2 (million)

transactions completed on the devices in Barclays branches

last year. The bank now has 7,000 “Digital Eagles” based in

branches, helping customers get online and showing them

how to use the latest mobile apps.”14

Barclays’ approach is a highly effective way to incorporate

digital into a traditional channel in order to support increasing

exposure to digital banking among less tech-savvy or privacy-

concerned customers who generally go to the branch. The

BYOP approach applies to completely digital banks too, since

each persona will have its own level of digital proficiency.

Centralising data assets is also core to the omnichannel

experience. Customers’ information, including their

preferences, must be both accessible and utilised across

departments — from risk to marketing — regardless of

whether an interaction happens via social media, online

or by phone. It’s important that those accessing customer

information know how to interpret it in order to help them

make the right decisions when servicing customers.

Similar to when someone shops at an online retail site, a

customer should be able to start a transaction online and

finish it over the phone or via another channel. Issuers who

can interpret omnichannel data will be able to make strategic

Other

Not comfortable

Comfortable if they have assistance

Totally comfortable

Graph 2. Consumers Embrace Self Service

How Comfortable are Consumers with Self Service Banking Activities?

0% 10% 20% 30% 40%

Source: Synergistics Research

32%

36%

25%

7%

Engaging Customers: Why Should FIs Move Toward a “Bring Your Own Persona” Approach?

www.tsys.com10

decisions about which offers to present to the customer —

and when to do so — improving customer engagement as

well as meeting or exceeding the FI’s goals.

Prescription #3: Maintain and build trust

It’s essential that banks convert existing data into insightful

intelligence about their customers. Leveraging both

predictive analytics and descriptive characteristics allows a

bank to classify its customers in distinct segments. By creating

digital customer profiles with a BYOP approach, a bank can

make more informed decisions on how, when and where to

engage someone. Greater personalisation — and providing

the right offers or information at the right time — also builds

trust with digital customers. Trust is absolutely critical, and

particularly so for customers like the Paranoids and the

Chameleons who are somewhat to very tech savvy but have

little willingness to share data due to privacy concerns.

Building trust entails providing clear value in exchange for

data collected. Consumers are more likely to find an offer

useful and trustworthy when it’s provided by a company

partnered with their card issuer. To implement this strategy

most effectively, issuers can ask their cardholders to identify

the merchant categories — such as dining, shopping and

travel — for which they want to receive offers. If a customer

elects shopping, for instance, the card issuer could send text

messages or emails with offers from retailers favoured by the

consumer. Those privacy-concerned customers would opt-in

for merchant partner offers via mailed statements or email,

since they may be leery of text messages asking them to sign

up for location-based offers.

It is essential for banks to operate within the parameters

established by the customer, as not doing so could break the

customer’s trust and preclude future interactions with that

customer in the digital realm. Furthermore, it could breach

TCF rules or the company’s own privacy policy. The 2015 TSYS

U.K. Consumer Payments Study revealed that a significant

portion of early adopters (69 percent) rated the ability to self-

determine the frequency of offers from their bank’s merchant

partners among the top two rankings (most valuable) on

a scale of one to seven. Issuers will need to respect those

preferences to maintain trust.

Prescription #4: Roll out BYOP with care

Once banks have laid the groundwork for BYOP, how do they

introduce it? Initial preparation for a rollout of BYOP involves

data gathering, addressing internal governance and external

regulatory issues, and ultimately identifying which customer

profiles to prioritise with new products or campaigns.

Many consumers are wary of signing up for digital

communication, fearing that they will find themselves under

a deluge of offers from other organisations or that their data

will be sold or used without their knowledge or consent.

When banks gather data — such as phone numbers, email

addresses and Internet browser cookies — they must be

transparent with customers about how the data will be used

and allow the customers to have control over that use. Letting

customers opt in to offers is one way banks let customers

determine how their data is used, and such ability tends to

engender more trust than when consumers are required

to opt out of offers because they are overwhelmed with

unwanted communications.

No Value

Little Value

Neutral

Valuable

Very Valuable

Graph 3. Self-direction Holds Wide Appeal

0% 10% 20% 30% 40%

How valuable would it be to self-determine levels of offers from merchants that have partnered with your bank?

Source: 2015 TSYS U.K. Consumer Payments Study

All Respondents Earlier Adopters

12%

20%

33%

39%

39%

9%

7%

7%

2%

32%

Engaging Customers: Why Should FIs Move Toward a “Bring Your Own Persona” Approach?

www.tsys.com11

sources1. “Preview: 2014 Top 10 Retail Banking Technology Trends.”

December 2013. CEB TowerGroup.

2. “Digital Transformation: The Central Challenge to Asset Management Firms.” Accenture.com. 2014. Web. March 2015. <http://www.accenture.com/us-en/landing-pages/Pages/digital transformation.aspx?c=dig_usfy15digtranspsgs&n=Finance_-_Banking_-_US&KW_ID=syZ5A815n_dc|pcrid|57574787095#financial-services>.

3. “2014 UK Financial Services Customer Survey: UKI Connected Banking.” Accenture.com. July 2014 Web. January 2015. <http://www.accenture.com/ SiteCollectionDocuments/PDF/Accenture-UK-Financial-Services-Customer-Survey.pdf>.

4. “2015 Retail Banking Outlook.” November 2014. Corporate Executive Board. Tower Group.

5. Kemp, Simon. “Digital, Social & Mobile Worldwide in 2015.” Wearesocial.net. 21 January 2015. Web. April 2015. <http://wearesocial.net/tag/sdmw/>.

6. Snyder, Scott. “Bring Your Own Persona: Rethinking Segmentation for the New Digital Consumer.” Blog: Knowledge@Wharton. University of Pennsylvania. Knowledge.wharton.upenn.edu. 23 October 2014. Web. April 2015. <http://knowledge.wharton.upenn.edu/article/bring-persona-rethinking-segmentation-new-digital-consumer/>.

7. “Statement on Providing Banking Services.” FDIC.gov. 12 February 2015. Web. April 2015. <https://www.fdic.gov/news/news/financial/2015/fil15005.pdf>.

8. “Capital One Cardholder Benefits.” Capitalone.com. Web. April 2015. <http://www.capitalone.com/credit-cards/benefits/>.

9. “Millennial Disruption Index.” Millenialdisruptionindex.com. Web. February 2015. <http://www.millennialdisruptionindex.com/>.

10. "2015 TSYS U.K. Consumer Payments Study.” tsys.com. 28 May 2015. Web. May 2015. <https://www.tsys.com/2015UKConsumerPaymentsSurvey>.

11. “Big Data Alchemy: How Can Banks Maximize the Value of their Customer Data?” Capgemini.com.14 April 2014. Web. April 2015. <https://www.capgemini.com/resources/big-data-customer-analytics-in-banks>.

12. Camhi, Jonatham. “Data Security: Consumers Trust Banks Over Retailers.” Banktech.com. 24 July 2014. Web. April 2015. <http://www.banktech.com/security/data-security-consumers-trust-banks-over-retailers-/a/d-id/1297540>.

13. “The Era of Self-Service Banking.” synergisticsresearch.com. 21 April 2014. Web. April 2015. <http://synergisticsresearch.com/era-self-service-banking>.

14. “U.K. Banking Financial Services Trends.” Pivotallab.com. 2014. Web. April 2015. <http://pivotallabs.com/wordpress/wp-content/uploads/2014/10/UK-Banking-Financial-Services-Trends-2014-PivotalLabs.pdf>.

Finally, banks should consider identifying and prioritising those

customers who are digitally savvy and very willing to share

their personal data — the Mainstreamers and Nomads. Clearly,

these segments contain the best candidates for receiving text

or in-app notifications on their mobile phone or for location-

based offers. It is imperative that issuers develop strategies to

address the unique traits of each persona,

since some customers may have not registered for Internet

or mobile banking — a likely case among the Paranoids

and Analogues.

ConclusionBy maximising digital technologies and the huge volumes of

data now available, issuers have a great opportunity to deepen

their customer relationships. They can use rich consumer data

profiles to more effectively segment and personalise their

customer communications and provide their customers with

relevant offers that will more likely be embraced and ultimately

lead to higher profitability.

To achieve such effective segmentation, however, issuers

must understand each customer’s unique behaviours and

attitudes when it comes to digital interactions — and that

can be achieved by creating BYOP personas built around

three key dimensions: customers’ level of trust, their digital

capability and their total relationship with the issuer. The

digital revolution is evolving quickly, and only those banks who

embrace it will be positioned to win over consumers for lasting

success going forward.

Engaging Customers: Why Should FIs Move Toward a “Bring Your Own Persona” Approach?

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About the AuthorsMorgan Beard Director of Strategic Marketing, TSYS InternationalMorgan Beard is Director of Strategic Marketing for TSYS International. In his current role, he focuses on identifying new markets and solutions for clients with TSYS' international business. In his tenure at TSYS, Beard has held a variety of previous roles in product marketing, where he was responsible for delivering product launches and thought leadership efforts.

Prior to joining TSYS in 2008, he spent 15 years in sales and marketing positions in the U.S. and Latin America, with experience ranging from Fortune 500 companies to start-ups. Among other accolades, Beard was recognised as a Top 10 Rising Star of Young Professionals Under 40 by Columbus and the Valley Magazine. Beard holds a degree in Spanish and economics from St. Lawrence University, as well as an International MBA from the University of South Carolina. He can be contacted at mbeard@tsys.com or www.twitter.com/morgan_beard.

Bruno Courbage Senior Director of Product Management, FICO Bruno is an accomplished credit risk management systems expert with over a decade of experience in product strategy, product management and professional services leadership roles. He is currently responsible for the Customer Management segment product strategy at FICO where he has built a new generation of tools used to make treatment decisions on existing customers.

Prior to joining FICO in 2011, Bruno held several leadership positions managing product lines in both Loan Originations and Customer Management, and in Client Services at Experian Decision Analytics. He directed software product line advancement to drive top and bottom line improvements. He has received recognition leading delivery teams and harvesting relationships, and won awards in product management innovation. Previously, he was responsible for global marketing and product management at Binuscan, Inc., a maker of software for publishing professionals.

Bruno grew up in Paris and now lives in the San Francisco Bay Area. He holds an MBA in Finance from the International University of Monaco and a Bachelor of Science in Mechanical Engineering from Case Western Reserve University. He can be reached at BrunoCourbage@fico.com.

About TSYSAt TSYS® (NYSE: TSS), we believe payments should revolve around people, not the other way aroundSM. We call this belief “People-Centered Payments®.” By putting people at the center of every decision we make, TSYS supports financial institutions, businesses and governments in more than 80 countries. Through NetSpend®, a TSYS company, we empower consumers with the convenience, security, and freedom to be self-banked. TSYS offers issuer services and merchant payment acceptance for credit, debit, prepaid, healthcare and business solutions.

TSYS’ headquarters are located in Columbus, Ga., U.S.A., with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS is a member of The Civic 50 and was named one of the 2013 World’s Most Ethical Companies by Ethisphere magazine. TSYS routinely posts all important information on its website. For more, please visit us at www.tsys.com.

About FICOFICO (NYSE: FICO) is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company’s groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption. These include the FICO® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count™. Learn more at www.fico.com. For FICO news and media resources, visit www.fico.com/news.

FICO, TRIAD and “Make every decision count” are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.

ContributorsThis report was prepared by TSYS. Contributors to this paper under the guidance of Morgan Beard and Bruno Courbage include: Independent Writer, Carolyn Kopf.